Keep your rates competitive and incentivise clients to refer a friend. Would you like to get into an Entrepreneur that requires almost no tech learning? It's home-based, so you don't need to factor in the cost of real estate. Get up-to-date research and data on hot business trends. With the right location, pricing, and menu, you can profit from running a carinderia with just a small capital. Validating your idea through crowdfunding offers a few unique benefits.
Up until now, you have not invested a dollar. If you want to add designs to visually present the product, you can use free design platforms like Invision or others. For hardware products, crowdfunding is the best pre-selling channel. You can pre-sell via your own website using TryCelery. Simply invite your interviewees to the site and, as usual, help them picture the product using designs and a video that can be as simple as recording yourself using a prototype. What comes first, pre-selling or projecting expenses?
During the interviews stage, have a general idea about your projected expenses in the first months always overestimate while being more specific as things demand, features, timeline get clearer before or during the pre-orders stage. In the meanwhile, you can use non-scalable resources and methods to offer the product or service.
No matter how complex your solution is, you can find a way to combine existing and sometimes completely unrelated tools to simulate the product logic and purpose. For instance, a simulation of an Uber concept can be as simple as a social media page with a phone number for riders to call. One of the team members picks up the phone, locate the rider, uses Find My Friend app to locate the driver, dispatch ride request and confirm ride.
This is non-scalable and has a lot of limitation but can save founders a lot of time in development until validation a lot of people call , generate revenue and possibly use it as a story to tell investors and future app users. Find the section below. A few examples will make the approach clearer. Instead of building a coupon marketplace site and app, Groupon founders started with a WordPress blog and by manually sending PDFs with vouchers that they also created manually.
This process by the way did not last long until they built their advanced web and mobile apps that helped them reach the second fastest company to ever reach a billion-dollar valuation in the world. ZeroCater connects companies with restaurants that would cater. The approach they took was very similar to that of Groupon. Doordash is a food delivery service. The team took the same approach by receiving orders through their quickly built landing page and assigning orders to nearby drivers, starting with their friends, through phone calls and Find My Friend App.
Zappos, the e-commerce shoe and clothing shop, did not have a product at all when founders announced their company and purchased shoes as needed from local shoe retailers instead of stocking their inventory. In this case, use one of the four approaches below. Yes, you can still get manual no matter how complex your logic is.
Netflix started with a landing page announcing their service and for accepting movie requests and payments. They handled every movie request manually until the demand exceeded their capacity. Another example includes a peer to peer money exchange platform for which the founding team processed all payment requests manually, including tracking payment and sending notifications for updates and confirmations.
For database, analytics, accounting and virtually anything that requires reporting, use the same logic as above. For example, Taylor Davidson from Foresight created a financial model for startups and investors.
His approach to introducing the product was as little as a video of him using the excel model which he uploaded to YouTube then to a landing page he created. As number of downloads increased exponentially ever since he posted the models, Taylor started charging users for downloads and help in its customization which he does manually up until today, 17, downloads later. To simulate the service, you can rely on platforms that offer similar features to yours which may be solving other problems but can also be used for other purposes.
Take the example of Facebook. Some of its features include sharing, messaging, profiling, listing, gaming, and grouping. For instance, for ride sharing applications like Uber, you can use as simple as a social media page with a phone number for riders to call. One of the team members picks up the phone, learns about the location of the rider, uses Find My Friend app to locate the other team members or contractors, calls the closest person, and confirms with riders.
One of such platforms is Bubble. In no longer than a few hours, you can create a functional web or mobile app with features that may take you days and thousands of dollars to create. Many applications operated under such app development platforms until stages well beyond the initial testing phase. After evaluating, selecting and internally testing the chosen non-scalable method, let it be your fastest path to market for quantitative testing and further validation. A founding team with complementary skills can go as far as building a quick solution in weeks.
Notice, so far, you may have still not spent a single dime except on a domain name if needed. There is so much to do and many tools to use that one can make significant progress and even generate revenue without spending a dollar. Another advantage of starting within a team of complementary skills is that hiring can be delayed until some higher level of validation is reached. Even for such teams, hiring begins the day the startup venture is initiated; execution customer interaction.
I hired the smartest and the most experienced. I also hired the hungry and least experienced. I choose and highly recommend that you choose the second every single time especially under a limited budget.
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The most experienced is not accustomed to a bootstrapping lifestyle especially if they are way beyond this stage in their career after having built or was involved in the build of a growth startup and experienced the luxury of working for a big corporation. Although not everyone has the privilege of being surrounded by potential team members that they can reach out to and follow up with, it is important that founders take the time to get to know qualified candidates for the job. It is as simple as starting skill hunting weeks ahead of this stage rather than the night the member is needed.
In the meantime, founders can work with the best candidates on smaller tasks, test projects, meet for coffee or help each other exchange services for free. In other words, what they really use the product for. For non-technical founders, freelancers can provide great help. Building a growth startup is more than just a perfect bug free software and a marketing budget.
Several iterations, inevitable system breakdowns, user complaints and other events and factors require permanent attention which not only rarely takes place with freelancers given their other responsibilities but also hard to manage distance and time difference. Freelancers can help but should not be the only help for long. Finding the right co-founder match is inevitable. And this takes time. Just like hiring, the best co-founding relationships are made not built. By now, most third party systems and tools such as hosting, email and analytics should still be free unless an upgrade is needed.
It may be time to create a legal entity and any partnership agreements needed between the founders. For this group of founders, investment will mostly go to product development and iterations. What you need to do is create a win partnership with a potential for the team or person who will be performing the service to get a lot more than what they asked in exchange for their services.
We started with hypothesis X and over time, through multiple interviews, we learned Y. In fact, we have Z number of subscribers to our mail list and believe it or not, W percentage of them pre-paid for our upcoming product.
And with this,. Here is another example.
Are customers buying or signing up as fast as you can build or add more capacity servers? Is revenue growing exponentially and customer acquisition cost decreasing considerably? If you are approaching or have reached this stage, you are ready to scale. With scaling comes new responsibilities. For software startups, scaling usually means hiring. By combining option pools with reinvestments and a slower growth, a startup can continue to operate without outside capital while hiring the best in the market.
Jason Fried, founder of Basecamp, is a proponent of the grow slow approach. Basecamp merged out of a design agency that Jason started in the 90s to become one of the leading project management platforms in the world.
Steady, sustainable growth is what Jason endorses. Smart debt can be of value at this stage. Borrowed funds to meet user demand, purchase equipment, expand and make other investments can be cheaper than selling equity even under high rates. Interns at this stage and even earlier , can have a tangible impact on your startup. When interests are aligned and with a fair compensation, as little as free meals and potential job consideration if certain milestones are met, a team of ambitious interns can push harder than you think despite lack of experience and expertise in the field.
For marketing, design, programming and even project management or assistance, interns can increase efficiency and productivity while building and preparing them to take on bigger responsibilities in the company. Just like hiring and building long term successful co-founding relationships, finding the right investors is not a matter of picking up the phone, cold calling or even meetings for coffee to discuss funding terms and valuations.
Mark Suster, entrepreneur turned VC, notes that by constantly taking focused VC meetings, you will have relationships established for when you are ready to raise. There it was. I hope I was able to better convey the fact that startup funding for venture initiation all the way to validation and product-market fit, should be the least of your worries. If it still is, sell services.
Better yet, sell services that solve the problem you plan to solve with your startup later on. Do it manually or using non-scalable resources. Always keep in mind that the best-case scenario is when your customers fund your startup. Offer discounts and free services for pre-orders.